Sports Gambling – Opportunities and Challenges

A recent U.S. Supreme Court ruling boosts the prospect of commercial sports gambling across the nation. In a 6-3 decision, the Court struck down a federal law that effectively banned sports gambling in most states. The way is now clear for states to legalize sports betting as a way to encourage tourism and increase tax revenue. Supreme Court Justice Samuel Alito wrote in the Court’s opinion, “Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”

The opportunities for states, sports organizations including the NCAA and the professional leagues abound: more tourism and greater tax revenue to the states, increased interest among the public resulting in growing revenue to the NFL, NBA, MLB, and the NHL, and their member teams along with the NCAA and colleges throughout the country. But the challenges are many: Whether the Congress acts to enact some kind of federal legislation or if it leaves the matter up to the states, the challenge will be to get any legislation and associated regulations right to protect the integrity of the games. Some observers believe that most sports books are likely to offer single-game bets, over-under bets, prop betting, teaser bets, and parlays as Nevada sports books do, increasing the complexity of required regulations. And if there’s a patchwork of state regulations, that would create even more challenges to assure compliance by all parties.

Responses to the Court’s decision from sports leaders have been swift:

* In a statement the NFL said, “The NFL’s long-standing and unwavering commitment to protecting the integrity of our game remains absolute. Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in those events. Given that history, we intend to call on Congress again this time to enact a core regulatory framework for legalized sports betting.”

* NBA Commissioner Adam Silver agreed. “We remain in favor of a federal framework that would provide a uniform approach to sports gambling in states that choose to permit it…”

* Tony Clark, executive director of the MLB Players Association, called the decision “monumental with far-reaching implications for baseball players and the game we love.” In a separate statement, MLB said its “most important priority is protecting the integrity of our games. We will continue to support legislation that creates air-tight coordination and partnerships between the states, casino operators and the governing bodies in sport toward that goal.”

* Sports industry lawyer, Chuck Baker said the decision, “turned the world of sports gambling into not only the Wild Wild West, but the Wild Wild North, South and East as well.”

* The world of college sports, relying on amateur student-athletes, has been resolute in its opposition to sports betting. David Remy, NCAA chief legal officer said, “While we are still reviewing the decision to understand the overall implications to college sports, we will adjust sports waging and championship policies to align with the direction from the court.”

“Sports betting poised to explode,” headlines the LA Times. The American Gaming Association estimates illegal gambling at least $150 billion a year. Brian McGill, a gaming analyst with the research firm Telsey Advisory Group estimates the amount illegally bet on sports may be as high as $400 billion a year. Whatever the number, it is expected to be far higher with legal betting.

With legalized sports gambling, the opportunities and challenges for the sports industry are many. But the real challenge, and the only one that really matters, is protecting the integrity of the games. Without that, nothing else matters.